Earlier today the Senate voted to approve an amendment to the portion of the financial regulatory reform bill dealing with “too big to fail” financial institutions.  The amendment is the result of an agreement reached earlier today between Senator Chris Dodd (D-Conn.), the chairman of the Senate Banking Committee, and Senator Richard Shelby (R-Ala.), the ranking member of that committee.

Today’s vote was the first formal movement on the reform bill since Republican senators allowed debate to begin late last week on the legislation, and has cleared the way for voting to proceed on the hundreds of other amendments being proposed by senators from both sides of the aisle.

Amendments approved:

• Sens. Chris Dodd (D-Conn.) and Richard Shelby (R-Ala.) reached an agreement on ‘too big to fail provisions’ that nix a $50 billion fund to cover costs of a financial collapse. It gives the Federal Deposit Insurance Corporation the ability to liquidate large firms with a line of credit from the Treasury Department. The FDIC would recoup losses by selling off assets of failed firms. Creditors would be required to pay back any money received above what they would’ve gotten through bankruptcy. The amendment limits the authority of regulators to help financial firms and would require Congressional approval of debt guarantees, such as what the FDIC did during the 2008 financial crisis. The Federal Reserve also could use emergency lending powers to assist solvent firms. (Approved, Roll Call vote, 93-5)
• Sen. Barbara Boxer (D-Calif.) has a two-page amendment that says no taxpayer funds will be used in liquidating failing firms.  (Approved, Roll Call vote, 96-1)
• Sen. Olympia Snowe (R-Maine) proposed two amendments considered together in the Senate. The first would strike language requiring banks to make disclosures such as the number and dollar amount of deposit accounts of customers, and geo-coding, by census tract, of residence or business location of each customer to the Consumer Financial Protection Bureau. The bill’s provisions would have imposed regulatory costs on banks and possibly violated privacy rights. (Approved, voice vote)
• The second amendment preserves the ability for small business owners to use their homes as collateral to access credit. (Approved, voice vote)

Amendments pending:

• Sen. Jack Reed (D-R.I.) is planning to introduce an amendment that would require investment advisers with more than $30 million in assets under management to register with the Securities and Exchange Commission.  The bill currently includes a provision that would require hedge fund managers (but not venture capital fund managers or private equity fund managers) that manage more than $100 million to register with the SEC.

• Democratic Sens. Robert Menendez (N.J.) and Daniel Akaka (Hawaii) will seek to impose a fiduciary duty standard of care to broker-dealers who provide investment advice.  This was part of the House bill that passed in December 2009 and part of the original Dodd bill proposed in November 2009, but was removed from the current version of the bill Dodd re-released in March of this year.
• Sens. Jeff Merkley (Ore.) and Carl Levin (Mich.) will seek to ban proprietary trading at banks.  The bill currently includes a provision directing regulators to restrict banks from proprietary trading, and from investing in or owning hedge funds and private equity funds.
• Sen. Patty Murray (D-Wash.) introduced an amendment requiring a state securities regulator to be represented on a new financial stability oversight council of regulators designed to look for broad systemic risks. The amendment is supported by the North American Securities Administrators Association.
• Sen. Byron Dorgan (D-N.D.) is expected to introduce an amendment banning “naked” credit default swaps, one form of derivatives.
• Sen. Bill Nelson (D-Fla.) wants to repeal “safe harbor” provisions for financial derivatives when a company goes into bankruptcy.
• Sen. Bob Corker (R-Tenn.) wants to strike legislation requiring lenders keep 5 percent of the risk, proposing instead to require a study of the asset-backed securitization process. Corker is joined by Sens. Mike Enzi (R-Wyo.) and Kay Bailey Hutchsion (R-Texas) on the amendment.
• Democratic Sens. Sherrod Brown (Ohio) and Ted Kaufman (Del.) are backing an amendment that targets the size, leveraging and capital requirements of  big banks. The amendment would impose a 10 percent cap on a firm’s share of total bank deposits in the country. It would limit at 2 percent a bank’s non-deposit liabilities and at 3 percent those liabilities at a non-bank. The amendment would also set a 6 percent leverage limit for bank holding companies and selected non-bank companies. The amendment is cosponsored by Sens. Bob Casey (D-Pa.), Sheldon Whitehouse (D-R.I.), Jeff Merkley (D-Ore.), Tom Harkin (D-I.A.), Bernie Sanders (I-Vt.) and Roland Burris (D-Ill.).
• Sens. Maria Cantwell (D-Wash.) and John McCain (R-Ariz.) have an amendment to include provisions similar to the 1933 Glass-Steagall Act that separated commercial and investment banking.
• Sen. Ron Wyden (D-Ore.) wants to require firms to disclose financial interests in the decline in value of financial products.
• Sens. Jim Webb (D-Va.) and Barbara Boxer (D-Calif.) have an amendment to tax bonuses at firms that received more than $5 billion in bailout money from he $700 billion rescue package. It would be a one-time tax on bonuses in excess of $400,000.

• Sen. Bernie Sanders (I-Vt.) wants to require the Government Accountability Office (GAO) to audit the Federal Reserve.
• Sen. Sam Brownback (R-Kan.) wants to exempt auto dealers from a new consumer financial protection office. The amendment is supported strongly by the National Automobile Dealers Association (NADA). President Barack Obama, the Treasury Department and Defense Department have all said they will fight efforts to exempt auto dealers.
• Sens. Jim Webb (D-Va.) and Barbara Boxer (D-Calif.) have an amendment to tax bonuses at firms that received more than $5 billion in bailout money from he $700 billion rescue package. It would be a one-time tax on bonuses in excess of $400,000.
• Sen. Russ Feingold (D-Wisc.) wants to eliminate automatic pay adjustments for members of Congress.
• Sen. Ben Cardin (D-Md.) wants the Securities and Exchange Commission (SEC) to require resource extraction companies to disclose payments to any foreign government or federal government for the extraction of oil, natural gas or minerals. The amendment is cosponsored by Sens. Richard Lugar (R-Ind.), Dick Durbin (D-Ill.), Charles Schumer (D-N.Y.), Russ Feingold (D-Wisc.), Jeff Merkley (D-Ore.) and Tim Johnson (D-S.D.).
• Sen. John McCain (R-Ariz.) is proposing to require regulators to come up with a date certain to end the conservatorship of Fannie Mae and Freddie Mac.
• Sen. Bill Nelson (D-Fla.) wants the Securities and Exchange Commission (SEC) to develop rules requiring credit rating agencies to have “current and reliable” ratings.
• Sens. Sheldon Whitehouse (D-R.I.), Jeff Merkley (D-Ore.), Dick Durbin (D-Ill.), Bernie Sanders (I-Vt.), Carl Levin (D-Mich.) and Roland Burris (D-Ill.) want to prevent consumer credit transactions from having higher rates than the maximum allowed in a given state.
• Sen. Bernie Sanders (I-Vt.) wants to create a national credit usury rate. Sanders is joined by Sens. Pat Leahy (D-Vt.), Tom Harkin (D-Iowa), Sheldon Whitehouse (D-R.I.) and Mark Begich (D-Alaska). The rate would be set at 15 percent. Credit unions would be exempt.
• Sen. Kay Bailey Hutchison (R-Texas) wants to preserve the Federal Reserve as the primary regulator of state member banks. Hutchison is joined on the amendment by Sens. Amy Klobuchar (D-Minn.), Mike Johanns (R-Neb.), Bob Corker (R-Tenn.), David Vitter (R-La.), Kit Bond (R-Mo.), Richard Shelby (R-Ala.), Mike Crapo (R-Idaho), Scott Brown (R-Mass.) and Bob Bennett (R-Utah). Major financial trade associations, including the Independent Community Bankers of America (ICBA), American Bankers Association (ABA), Financial Services Forum and Financial Services Roundtable have urged senators to keep the Fed as a regulator over smaller state-member banks.
• Sen. David Vitter (R-La.) wants to strike a section of the bill aimed at expanding access to financial activities and banks for low and moderate income people. The legislation would encourage regulators to conduct studies and provide incentives away from payday loans.
• Sen. Kay Hagan (D-N.C.) is joined by Sens. Charles Schumer (D-N.Y.) and Dick Durbin (D-Ill.) on an amendment reining in the payday loan industry. The amendment would cap at six the number of short-term loans a borrower may have in a given year.
• Sen. Jeff Merkley (D-Ore.) plans to introduce an amendment ensuring state insurance regulators retain strong powers under a new Office of National Insurance. Merkley is concerned the office would preempt state insurance rules.
• Sen. Orrin Hatch (R-Utah) has an amendment to require the Treasury Department to report to Congress within six months with a plan to reform Fannie Mae and Freddie Mac. The amendment is also backed by Sens. Scott Brown (R-Mass.) and Mike Enzi (R-Wyo.)
• Sen. Dick Durbin (D-Ill.) has an amendment to give the consumer protection office power over private student loans.
• Sen. Dick Durbin (D-Ill.) has three amendments aimed at restricting “interchange fees” between credit card issuers and merchants, retailers and others. The three amendments apply to debit cards, interchange fees charged to the government and anti-competitive practices.
• Sens. Ron Wyden (D-Ore.) and Charles Grassley (R-Iowa) want to end the practice of senators placing secret holds. The amendment would require written notice and publication of a hold.
• Sen. Tom Harkin (D-Iowa) introduced an amendment to require the new consumer financial regulator to ensure that ATM fees, “bear a reasonable relation to the cost of processing the transaction.” Harkin is joined by Sens. Charles Schumer (D-N.Y.) and Bernie Sanders (I-Vt.) on the amendment.
• Sen. Pat Leahy (D-Vt.) submitted an amendment to include a new title to the bill, called the “Faster FOIA Act of 2010.” The legislation would require a commission to study ways to improve the speed of freedom of information act requests. The commission would have congressional and executive branch appointees.
• Sen. Mark Pryor (D-Ark.) submitted an amendment giving the Securities and Exchange Commission greater power to look at credit rating agencies.
• Sen. Charles Schumer (D-N.Y.) wants to require the Department of Housing and Urban Development to establish a program to protect tenants and at-risk multifamily properties.
• Sen. Mark Udall (D-Colo.) has an amendment to require free credit scores. The amendment is cosponsored by Sens. Richard Lugar (R-Ind.), Kit Bond (R-Mo.), Scott Brown (R-Mass.), Sherrod Brown (D-Ohio), Kay Hagan (D-N.C.), Carl Levin (D-Mich.), Joe Lieberman (I-Conn.), Claire McCaskill (D-Mo.) and Jeanne Shaheen (D-N.H.).
• Sen. Bob Corker (R-Tenn.) submitted an amendment requiring an, “Asset Bubble Study.” Corker wants federal regulators and agencies to study the, “feasability and advisability of establishing quantitative criteria for identifying housing bubbles.” The amendment is backed by Sens. Mike Enzi (R-Wyo.), Johnny Isakson (R-Ga.), Saxby Chambliss (R-Ga.) and John Barrasso (R-Wyo.).
• Sen. Al Franken (D-Minn.) has an amendment prevent conflicts of interest in the credit rating agency industry. Currently issuers pay ratings firms to grade their offerings. Franken wants to create a Credit Rating Agency Board to task a ratings firm to grade each offering. Franken is joined by Sens. Charles Schumer (D-N.Y.) and Bill Nelson (D-Fla.) on the amendment.